Chapters in Macro & Economy
Chapter 6 of 7 · 5 min read
Shock transmission and scenario analysis
What happens to sectors and your portfolio if oil, the rupee or US yields move.
Transmission betas estimate how sensitive a sector or stock has historically been to a macro driver. A sector with a high oil beta tends to fall when crude spikes.
Scenarios
A scenario applies a hypothetical shock, such as crude +20% or INR −5%, and estimates the impact using those sensitivities. It is a what-if for risk awareness, not a forecast.
Use scenarios to find which holdings are most exposed and whether that exposure is intended.
Key takeaways
- Betas are historical estimates and can shift.
- Scenarios illustrate exposure, not probability.
- Run them to find concentrations you did not intend.
Put it into practice
Open the live page on Market Intelligence and see this concept on real data.
Keep learning
- Risk metrics: volatility, drawdown, VaR, beta and Sharpe · Portfolio & Risk Management
Education only, not investment advice. Updated 2026-10-09.